One Price Fits All: New York and California Push Back on Personalized Pricing Tactics

We forecasted that more states would take legislative action to limit or prohibit these practices. That prediction is now materializing: New York has sent a comprehensive surveillance pricing ban to the governor’s desk, and California has advanced its own bill through the state Assembly. 

New York’s One Fair Price Act: Encompasses New York Businesses and Those With New York Consumers 

On June 5, New York’s legislature passed S.B. 8623, known as the One Fair Price Act, which will amend the state’s unfair, deceptive, and abusive consumer practices law. The bill would make New York the third state — behind Maryland and Connecticut — to ban companies from using consumer data to set individualized prices. 

Who the Bill Impacts

Notably, the bill is far-reaching when it comes to affected companies. The One Fair Price Act uses a broad definition of “consumer.” The Act is focused on any consumer who is “seeking” to purchase or is “solicited to purchase” a good or service “in New York state” or those consumers solicited by an “entity domiciled in New York state.” In short, this captures both New York-based companies and those who solicit New York consumers — even those companies which are outside of New York. 

What the Bill Prohibits 

At its core, the One Fair Price Act bars businesses across retail, grocery, e-commerce, and other industries from using algorithmic systems that rely on personal data — such as income, family size, location, and browsing activities — to charge different consumers different prices for the same goods or services. Specifically, the One Fair Price Act:

• Prohibits any entity or service provider from setting or adjusting a reference price or consumer price using surveillance pricing. 

• Bans advertising, promoting, or publishing any offer that uses surveillance pricing.

• Bars the collection, use, sale, retention, sharing, or disclosure of personal data for the purpose of facilitating surveillance pricing. 

• Requires entities using dynamic pricing that changes more than once in a 24-hour period to clearly disclose the use of dynamic pricing, the frequency of price changes, and the conditions that factor into pricing. 

Key Exemptions 

The bill carves out certain regulated financial institutions, pricing expressly required or authorized by law, and loyalty, rewards, membership, and other programs that offer discounts uniformly to consumers who meet clearly disclosed eligibility criteria (e.g., “teachers” or “seniors” discounts). It also excludes ride-hailing fare calculations based solely on mileage and trip duration. 

Enforcement and Penalties 

The New York Attorney General (AG) is the primary enforcement authority. Violators face civil penalties of up to $5,000 for a first violation and $20,000 for each subsequent violation, or the profits earned from the violation, whichever is greater. Municipal consumer affairs offices and local enforcement officers may also enforce the law. 

The One Fair Price Act now sits on Governor Kathy Hochul’s desk awaiting her signature. The bill has the strong backing of Attorney General Letitia James, who called its passage “a big victory in our fight to ban surveillance pricing and help make life more affordable in New York.” If enacted, the law would take effect 180 days after the governor signs it.

California’s AB 2564: A Similar Push on the West Coast

California is advancing its own surveillance pricing ban through Assembly Bill (AB) 2564. On May 27, the state Assembly passed the bill, and it now moves to the state Senate. If it clears the Senate, it will proceed to Governor Gavin Newsom’s desk later this fall. 

How It Compares to New York 

Like New York’s bill, AB 2564 prohibits retailers from setting customized prices based on personally identifiable information collected through electronic surveillance technology, including data gathered from sensors, cameras, device tracking, biometric monitoring, or purchased from third parties. The bill similarly protects transparently offered discounts, including those tied to loyalty programs, publicly disclosed eligibility criteria, and broadly defined group memberships such as military, seniors, and students. 

However, there are notable differences. California’s bill is framed more narrowly around “retailers” as defined under the state’s tax code, whereas New York’s bill applies broadly to any “entity” doing business in the state. On enforcement, California’s bill allows public prosecutors — including the AG, city attorneys, and county counsel — to bring civil actions with penalties of up to $12,500 per violation, and up to three times that amount for intentional violations. Notably, California’s bill also provides consumers with a private right of action for injunctive relief, a provision that was removed from the New York bill during the legislative process. 

Key Next Steps for Companies

• Evaluate whether your company falls within the New York bill’s scope. The One Fair Price Act applies to any “entity” domiciled in New York or doing business in the state, including out-of-state and online businesses that sell to or target New York consumers. Companies should assess whether their operations, customer base, or sales activities would bring them within the bill’s definitions.

• Audit current data collection and pricing practices. Companies should review what consumer data they collect — including income, location, browsing history, and device information — and assess whether any of that data is used to set or adjust consumer prices. If so, evaluate whether those practices would violate the bill’s prohibition on surveillance pricing.

• Closely scrutinize in-development algorithmic pricing strategies. In addition to existing practices, companies should closely evaluate proposed or in-development pricing strategies. This evaluation should determine whether the strategy can be deployed as-is, without violating the New York bill’s requirements. If not, companies should determine what changes need to be made before deployment.

For more information or insights into how these laws could impact your specific business model, reach out to the authors or a member of the Consumer Products team.